Outside in the biting cold, Chairman Yasser Arafat of the Palestine Liberation Organization today harangued about 250 of his troops stationed since their evacuation from Beirut last summer near this remote plateau town not far from the Tunisian border.

This was his fifth morale-building visit to the troops, some of whom looked barely 12 years old. To polite applause from the guests flown down in Algerian Air Force planes from Algiers, he announced that their hosts would train them on heavy weapons they had never possessed, even in Beirut.

Inside a building at the Algerian Army barracks lent to the Palestinian fighters, Mohammed Milhem, deported mayor of Halhoul on the Israeli-occupied West Bank, said he was trying to "avoid freezing to death." There was something about the remark to suggest he meant it both literally and figuratively.

Back at the Club des Pins conference hall near the capital, delegates marked time on the sixth day of a marathon session of the Palestine National Council, or unofficial parliament, that keeps arguing and rearguing issues, seemingly fearful of reaching a consensus.

Arafat had the easiest role. He inspected the troops. He joined in their basic training, grabbing a rifle to demonstrate the proper bayonet lunge and close-combat techniques.

Speaking on a simple platform decorated with Algerian and Palestinian flags and balloons bearing his image, Arafat said, "Today you are here, but one day you will fight in Palestine." He had used the same theme dozens of times in addressing parades. But that was back in Beirut, in better times.

Beirut is where many of the soldiers' hearts and families are.

"We look at the ground, we look at the sky," one young trooper said. "We train and we play football."

Milhem and Fahd Kawasme, the mayor of Hebron who was also deported by the Israelis, had their hearts set on the West Bank. When President Reagan announced his Middle East peace initiative Sept. 1, he apparently had people like the two mayors in mind. They are moderates and not members of the PLO. Thus they were potential Palestinian delegates who would negotiate--with tacit PLO blessing--alongside Jordan in talks with Israel about the future of the West Bank.

That was how the United States wanted the Middle East's Gordian knot cut. Milhem recalled his meeting Nov. 23 in Washington with Secretary of State George P. Shultz and Shultz's promises to demonstrate American credibility in the region.

That was back when King Hussein of Jordan was enthusiastic enough about such an approach to promise to make known his decision on entering the negotiations by March 1. No one talks about that date anymore. No one at the council meeting in Algiers talks about Milhem and Kawasme serving on such a delegation.

For better or for worse, the PLO seems to prefer to save its precarious unity rather than risk a split--and perhaps its final disintegration--by backing such a move when the Israelis have rejected the Reagan plan and the Americans are viewed here as having done nothing to defend it.

Somewhat wearily Milhem said, "I cannot convince any Arab that the Americans can do anything about the Israelis."

The military exercises ended. Everyone lunched on a mechoui--or roast lamb--served in a giant warehouse of a building where six long tables were laid for 400 guests. Two Palestinian bagpipers--trained by the Jordanian Army, which itself had once been instructed by the British--marched majestically around the tables, their pipes blaring.

Arafat kissed babies and smiled for the photographers and television crews. His troops pressed their families' telephone numbers on Beirut-based correspondents.

After lunch, Arafat and his party drove down the road to a new village. There Algerian women ululated in welcome and their men swarmed the narrow, gravel-covered street. The village is named Sabra and Shatila after the Beirut refugee camps where hundreds of Palestinian civilians were massacred in September by Lebanese Christian militia forces.

In theory, the families of Palestinian fighters based in Tebessa will live in the village, but there are only 30 such families here now. The local peasants may end up having the place to themselves.